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Is Student Loan Debt Really "Good" Debt?

How Do You Know If Borrowing Money for School Is A Smart Choice for YOU?

Prospective college students and their parents often take it as an article of faith that higher education is a good investment--even if they have to borrow the money to pay for it. But in many cases,that's simply not true. A surprising number of students who take on debt for school end up worse off financially than if they had never attended college at all.

Young people making plans for college or career training are not necessarily very realistic about the long term implications of their choices. And advice from counselors, colleges, and lenders isn't always based on the best interests of the student.

That's why MONEYSCHOOL will soon release two special reports to help students and their parents evaluate college as investment, and to understand the potentially serious downside risks of student loan debt.

Certainly, it's true that educational loan programs are beneficial to many students. But a lot depends on the type of loan, the type of school, the cost of attendance, the student's academic ability, and the economic value of the degree being pursued.

As many as half of entering college students don't graduate, and many more graduate with degrees that do little or nothing to improve their earning power. As a result, many have trouble keeping up with the payments on their student loans after they leave school. That's when they learn how unforgiving the system is.

Most borrowers don't realize until it's too late that student loans come with none of the consumer protections associated with to other forms of credit. Defaulting on a student loan can result in huge penalties, fees, and collection costs which are added to the balance of the loan. Plus...

Under current law, student loans can't even be canceled through bankruptcy, and there are endless horror stories to prove that lenders are absolutely ruthless in pursuing repayment--right down to garnishing wages and taking tax refunds, social security benefits, and even disability payments. (Oh, yes they can and they do!)

To get our special reports on college as an investment, and how to protect yourself from dangerous student loan debt, all you have to do is give us your email address and we'll let you know as soon as they are available!

Are You Building A Secure Future?

Lack of Financial Education Is The Primary Reason
Why Most People Fail to Realize Their Dreams.

MONEYSCHOOL Can Show You How to Acquire the Knowledge, Skills, and Attitudes You Need to Be Financially Successful!

Becoming financially well-off has never been easy for those of us who weren't blessed with wealthy parents, exceptional talent, or freakish good luck. Yes, it is possible to get to the top of the economic ladder without those rare advantages, but don't expect it to happen by accident.

If you are like most people, having a lot of money probably ranks pretty high on your personal wish list. But, if you are like most people, you don't have a clue about how to make that wish come true in the real world.

Young adults, in particular, tend to be much too optimistic about their chances of somehow ending up rich. The truth is, unless you get serious at an early age, and make smart financial choices over much of your adult life, the odds are stacked very heavily against you.

Here's a reality check! The median household income in the U. S. is about $48,000 a year. "Median" means half earn more and half earn less. And since we're talking about household income, that number can include more than one wage earner. Fewer than 20% of U. S. households have annual incomes over $100,000, and only 3.5% exceed $200,000.

When it comes to wealth, most people just don't have any. A 2007 study by the Employee Benefit Research Institute found that more than half of Americans age 55+ have saved less than $50,000 for retirement.

Think you are going to be a millionaire by age 40? The share of households in the U. S. worth at least one million dollars, not counting home equity, is about 4%. And the exceptional few who can actually afford the fabulous mansions and private jets that fit the popular image of being "rich," make up far less than 1% of the population.

The point is, an ordinary person who wants to be a financial overachiever has to think very differently about money than most people, because most people don't know the first thing about what it actually takes to be financially successful.

To beat the odds, you have to be knowledgeable and disciplined about personal finance and money management. And you need to continue your financial education throughout your life.

Sadly, our educational system does a terrible job of preparing students to succeed economically. It's not an exaggeration to say that 85% of the population is financially illiterate, and that includes most college graduates. Lots of otherwise-intelligent people go through life without the most basic understanding of the financial world, and wonder why they never get ahead.

Here's a perfect example! Over the past several years, millions of Americans destroyed themselves financially by taking out adjustable-rate mortgages they couldn't afford after the initial low "teaser" interest rate expired.

Those who were thinking at all apparently believed they would always be able to refinance into a new loan before their monthly payments became unaffordable. They bought into the prevailing myth that real estate prices never go down.

The resulting disaster was absolutely predictable. In fact, it was predicted by observers who know something about economic history. But millions of families were crushed by the mortgage meltdown, because they were playing for high stakes without understanding the most basic rules of the game. Many of them will never fully recover.

If you want to be one of the exceptional few who make their financial dreams a reality, you have to take responsibility for your own financial education. No one is going to make you learn what you need to know. Our mission at MONEYSCHOOL is make that task much easier, by providing you with educational resources, guidance, and motivation.

Right now we're focused on helping young adults make good decisions about how they invest in education. The choices you make about college or career training, and how to pay for it, are among the most important financial decisions of your life.

But far too many young people are not making good choices. They are taking out big loans for college because everyone tells them that college is a good investment. But for many students, college is not a good investment, especially if they have to borrow the money to pay for it.

The world is changing. College costs are skyrocketing, but wages are not keeping pace. Unemployment is at multi-decade highs and isn't likely to return to 2007 levels for a long time. Many college grads are being crushed by student loan debts they can't afford to repay.

We are all for higher education, as long as it's worth more than it costs. But contrary to what most people believe, that's often not the case. So before you make plans for college or career training, be sure you consider very carefully whether your return on the investment is likely to be positive.

To read about our soon-to-be-released special reports on evaluating college as an investment, and the risks of student loan debt, please see the sidebar.